Economist threatens legal action over aid

An economist who has threatened a legal challenge to German aid for Greece said Germany's highest court was unlikely to refuse…

An economist who has threatened a legal challenge to German aid for Greece said Germany's highest court was unlikely to refuse his complaint because support for it was growing.

Joachim Starbatty, a professor at Tuebingen University, said the best solution would be for Greece to exit the euro zone and devalue its currency to revive its debt-stricken economy.

"We expect that the Federal Constitutional Court will not reject our suit, because our initiative has unbelievably big support," Mr Starbatty told Czech newspaper Mlada Fronta Dnes.

How the court might respond to a challenge is uncertain. It could suspend German aid while it assessed its legality, but legal experts say that due to the matter's urgency, the court could also allow aid to flow while it looked into it.

Mr Starbatty said both citizens and political parties had shown support for the challenge, which could prove a headache for chancellor Angela Merkel, who heads a centre-right coalition of conservatives and pro-business Free Democrats (FDP).

"Differences in opinion exist also in the governing (conservative) CDU/CSU, but over the past weeks the support has strengthened substantially," Mr Starbatty said.

Ms Merkel said yesterday that Greece's international bailout must be accelerated for the sake of the euro zone. Markets have been hit over fears that Greece may not secure aid in time to meet a debt deadline of May 19th.

Mr Starbatty said Greece leaving the zone and having its own currency would be the best solution to its problems.

"If they had their own currency, which they could devalue, they would get back their competitiveness," he said.

Reuters